About this Show

Closing Bell

News/Business. Daily stock market analysis. (CC) (Stereo)

NETWORK

DURATION
01:00:00

RATING

SCANNED IN

SOURCE

TUNER

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
704

PIXEL HEIGHT
480

TOPIC FREQUENCY

Us 11, S&p 9, Ken Lewis 8, Sec 7, America 7, U.s. 6, United States 5, India 4, Michelle 4, Clinton 3, Caterpillar 3, Kim Jong-il 3, Asia 3, Bob 3, North Korea 3, North Koreans 2, Dom Tar 2, Toyota 2, North America 2, Jim Owens 2,
Borrow a DVD
of this show
  CNBC    Closing Bell    News/Business. Daily stock  
   market analysis. (CC) (Stereo)  

    August 4, 2009
    3:00 - 4:00pm EDT  

3:00pm
rest of the stock market in the last two, maybe three days. today once again, they are doing very well. i want to know that cit yesterday talked about sweetening the terms of their bond offering. that's having a positive impact, had a positive impact on financials yesterday and may also be helping again here today. let's talk about caterpillar. again, we've got an analysts meeting for caterpillar. jim owens making very important comments about 2012, four years away. here's the important thing. they're talking about a netable upswing, not just in the top line but potentially doubling their top line but notable increases in the bottom line. they're talking about earnings of $8 to $10 four years from now. why is that significant? we're talking about a consensus estimate of $1.43 this year. to $8 to $10 is a significant jump. small increases in the top line, big increases in the bottom line is the power of cost cutting.
3:01pm
trader talk.cnbc.com. let's talk to all my friends, brian shactman standing by at nasdaq. >> that everythinks you very mu. we've been in negative territory for most of the day. we are still just a point above that 2,000 mark. i do want to point out to people, the internals there are slightly more advancers to decliners. quick peek what's working. it's steadily been bleeding but dell still in positive territory, yahoo! up 1.1%. research in motion, most of these names off the highs but up 2%. starbucks 52-week highs. they're streamlining everything to cut costs, even five seconds in your coffee delivery means more money for them and people a little more bullish on the stock. cognizant, up 10% today. also reaching a 52-week high.
3:02pm
what's not working? we have oracle down 2.5%, qualcomm down 2%, and palm down. it's a pretty volatile name. the palm pre trying to sync up with apple itunes. it's appealing to a trade group for help. we'll see what happens. we've got an hour left trading. we have a slew of interesting earnings. i want to start with some things that will give us insight into the consumer, whole foods and jack-in-the-box and papa johns all report after the bell. we'll get insight into the health of the u.s. consumer. sef fa lon and ea sports report as well, both stocks strongly to the upside. the nymex we have sharon epperson. >> a busy session in the electronic trading session today in the oil market as well with the oil inventory report coming out at 4:30 p.m. we settled down about 16 cents hovering around $71 a barrel as traders wait for this data to
3:03pm
come out. we're also looking at the fact that after plunging to its lowest level since september, the dollar index today has been basically flat. that's another reason why we had rather lackluster activity in the oil complex today. what we're expecting according to the platt survey is for an increase in crude supplies of about 1.5 million barrels. gasoline supplies expected to be down. distill lats supplies expected to be higher. refinery runs continue to fall down to about 84% capacity. that cut in refinery run rates happening week after week has had somewhat of an impact. the surge of about 20% or more in both gasoline and heating oil futures. natural gas, the story there today had to do with colorado state university's hurricane forecast. they lower it had once again saying now there will be ten named storms, four hurricanes. that is well below average for
3:04pm
the usual atlantic hurricane season. a lot of short activity in that market and always a lot of volatility there, as well. what's interest with the dollar still basically being flat is metals continue their momentum rise. gold up 7% since july 9th, silver up 13%, platinum up 14%. >> i could stand here and tell you that interest rates for the most part move higher today and they've been very buoyant in that regard but i like to be proacti proactive. why are they moving it at all today. it's pretty easy, because if you look at s&p futures prices, and instead of look at yields you look at ten-year note futures prices, what i see and your screen is going to be a ten-minute or if i look at a three-minute, when the stock market moves down and the s&ps, the price of ten-years moves up and it's like an mirror image
3:05pm
and unbelievable how it's worked owl day. on a quiet day, traders are playing a very modified less safety trade predicated on the bointcy of stocks. now the real big story and sharon's hit it every time is the dollar. even though it's had a huge move, intraday not very exciting. look where we are sitting on a day we're not exciting and you can see itten ot zoom, at fairly low levels, basically the lowest levels in ten months. we want to watch this. if we go sideways instead of bounce, many traders going into the end of week employment report might get nervous about taking a stab at buying what has been a pretty big selloff. >> taking a look at today's business headlines, you saw bob talking about how well the home building stocks are doing because of this, the national association of realtors reporting pending home sales jumped 3.6% in june. that was much better economists
3:06pm
were expecting. it's the sixth consecutive monthly gain, the first winning streak in six years. the commerce department reporting personal spending larger mostly due to a large increase in nondurable goods spending. personal income fell 1.3%. that was a bigger decline than forecast and largest drop in 4.5 years. toyota reducing its loss forecast. japanese automaker now expects to lose $4.7 billion compared tore its prediction of losing 5.8 billion. toyota increasing global sales forecast by 100,000 to reflect strong sales of its prius hybrid in japan. >> thanks very much. joining me on the floor, rick benster, head of research and execution along are sri kumar. you have already said you think we're essentially in bubble territory here. why is that? >> the reason, bob, is that the
3:07pm
stock market is going up, the initial drive after the march 9th low clearly came from the fact there was no armageddon, no depression, but the stocks have moved up substantially, not only the s&p but you had a 25% rise in copper prices just in the past month. and i think what we are see here is running away from the dollar and concerns about inflationary expectations and that kind of a stock market upward move i believe cannot be sustained. the economic fundamentals are still calling for further weakness ahead as the consumer is not yet supporting the rally very much. >> is it time to take some money off the table? >> we advised clients this morning to lift some of their -- four reasons came to us right away. first of all, the low in march was 667 at 50% or 1.5 times that, you get 1,000. if you look at a broader picture from all highs to the lows,
3:08pm
1,00014 is 32.% fibonacci number also something we look at within a percent of today's highs. technical models are full of demarcators showing upside exhaustion and the biggest thing to us is one of the polls we look at is daily sentiment index showing 88% in the s.3 futures right now. >> i've been here 19 years. i use the bullish commentary on air and it seems to be getting a little more, i don't want to use the word giddy but at a higher level than it's been recently. yet, they tried shorting the market. we saw active attempts to short market six or seven days ago. we saw these drops and it didn't drop much and came back late in the last hour again. and the ultimate rally is not coming so that it's a rally in a bear market. >> bob, i think what happened
3:09pm
there was the fact that the second earnings turned out to be much better than many people expected. and without that, we may not have had the big run-up that we have seen. but eventually, i think within the next two to three months, you're going to see the economic weakness futures set in. i have expectations for positive growth in the next two quarters but the beginning of 2010 minus 2% in the first quarter as some of the similars from the spending and cash for clunkers comes to an end, and that the consumers go on strike and if you have a flight from the dollar or even bigger increase in interest rates that gets accentuated. >> it is a little bit strange that we're supposed to get a rally here that's based on essentially deleveraging by the consumer which is really what's going on. how much of a real push-up on fundamentals can you expect when the consume ser deleveraging? >> i agree with you. we started out with a savings rate being about 0 in 2007. even though we had to pull back
3:10pm
in the savings rate today, i think it is headed to 8 to 10%. that means that much has to be made up by stimulus. if you stimulate that much, the rates are going to go up. >> weakness in the dollar has helped commodity stocks. certainly u.s. companies based overseas have helped. is there anything out there right now that would support the dollar? is there any possibility of a bounce? >> there is a possibility from the same type hole that showed 88% bulls in the s&p futures it's only 3% bulls in the u.s. dollar. this poll has been right in the sense that in the last 15, 20 days, the readings have been sub 20%. the dollar has move down. but at 3%, there isn't much room to go other than one direction and nobody's looking for a bounce of the dollar. if you get a bounce, you've got to figure energy and commodity names come off a bit. >> i would probably take a different tact. i think the dollar was safe in
3:11pm
the fall of 2008 by lehman brothers. the collapse is what caused the dollar to strengthen again. if you don't have a similar crisis, i think the dollar keeps dropping. in that setup, energy commodities, materials do well. basically growth equities do not do well under that context. that's a big risk we run. >> very unhappy foreign investors like the chinese you're going to have who are very much involved in the entire u.s. economic process. we're going to have to leave it there. dow jones industrial average just in positive territory right now. the nasdaq also sitting it just slightly negative territory. tech underperforming today. michelle? >> bob, the ceo of franklin mutual advisors overseize $52 billion in assets, a big fan of value oo stocks right now. up next, where he's seeing the biggest opportunities in this market. >> a "fast money" final call spin is in. why tobacco and alcohol stocks could give your portfolio good
3:12pm
returns in this market coming up. after the bell, look to chairman and ceo thomas ryan explains cvscracy growth. >> first the most active stocks led by citigroup as always.
3:13pm
tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move. tdd#: 1-800-345-2550 doesn't matter if a company sells computer chips tdd#: 1-800-345-2550 or, i don't know, fish and chips. tdd#: 1-800-345-2550 i'll look at all kinds of stocks before i settle on one. tdd#: 1-800-345-2550 if i think i'm onto something i'll check it out, tdd#: 1-800-345-2550 you know, see what other traders are up to. tdd#: 1-800-345-2550 when everything feels right though, tdd#: 1-800-345-2550 that's when i get serious. tdd#: 1-800-345-2550 and the minute i get into something, tdd#: 1-800-345-2550 i already know when i want to get out. tdd#: 1-800-345-2550 of course, every now and then i'll talk with somebody tdd#: 1-800-345-2550 who knows what i'm trying to do. tdd#: 1-800-345-2550 (announcer) switch to schwab today. tdd#: 1-800-345-2550 you'll get the tools, the technology tdd#: 1-800-345-2550 and the support to trade your way. tdd#: 1-800-345-2550 go to schwab.com/trader tdd#: 1-800-345-2550 or call 1-800-540-7304 tdd#: 1-800-345-2550 right now. tdd#: 1-800-345-2550 but opportunities can vanish like that... tdd#: 1-800-345-2550 ...so most days, i'm right there tdd#: 1-800-345-2550 when the market opens.
3:14pm
3:15pm
closing bell realtime flash/introduction. i want to introduce you folks to a little company in the russell 2,000. if you know of dom tar, then bear with me. if you don't, check it out. 22% higher here today. the best day this company has seen. they're based in montreal, operations all over north america. it's a paper and wood company. highly cyclical. less worse than expect results, one of the top five performers in the russell 2,000 right now. the stock's up 23% today, up 60% since earnings season started a month ago and the company is saying they're having lower input costs and better cost
3:16pm
controls. that is helping things out. dom tar, the former dominican tar and chemical with a big, big rally today. yeah, it's down but up from the bottom. back to you. >> thank you, matthew. franklin mutual advisors ringing the closing bell today in honor of the 60th anniversary of their mutual series groups, one of the oldest mutual funds out there. the group an's flagship here it, mutual funds outperform the s&p up nearly 26% over that period. joining me chairman and ceo of franklin mutual advisors peter langerman. more importantly, what was the last -- the first mutual funds came out in the 1930s. >> we were one of the first and i think the interesting thing for us, we are our 60th industry and basically doing the same kinds of things, trying to find cheap stocks, stocks trading at discounts in intrinsic value we've been doing for 60 years. >> i think of franklin as a
3:17pm
value shop. is that fair? >> certainly the mutual series funds are value investors so-called deep value you'd invest investors. we're looking at low price to cash no, low price earnings, significant asset value. we leave the high growth companies to some of our brethren. a lot of down and out companies that traded very attractive valuations that for reasons people don't like. >> low price to cash flow, for example. >> we focus on a lot of different parameters but cash flow was our primary evaluation parameter. >> what do you like? two stocks in the united states you think are a particular good value. >> one just reported today, cvs, a combination of a retail drugstore and pharmacy benefit manager. some might say that's kind of boring. you look at the valuation, very attractive in terms of cash no, trading at a low multiple, double digit low multiple of earnings. some people don't like the combination of the retail and pharmacy benefit manager.
3:18pm
we think the combination makes a lot of sense, good management, very shareholder oriented. >> what else? how about overseas? half of your investments are overseas right now. >> a name kpn, a tell come operator. >> in the netherlands. >> excellent management, trades at a very attractive valuation, double digit precash flows, shareholder friendly, doing the right thing. people think it's kind of boring. for us, boring can be excited. >> how has growth done against value since the march bottom? >> for us as value inners we don't pay attention. some stocks you might say they trade high ips because the company had a high quarter. we look at the intrinsic value of companies. there's a place in people's port foals for deep value. >> again, you know, we just look at cheap stocks.
3:19pm
>> any other final recommendatio recommendations? what other stock? >> transocean, another u.s. company. very solid assets. got a backlog that's very, very solid with high quality operators and very attractive valuation. good management, very shareholder friendly. people think there's too much risk perhaps in oil prices but even with oil prices at 40, 50, 60 bucks, very good cash flows. >> peter langer man, thanks for joining us. >> my pleasure. >> bob, there's about 39 minutes before the bell. the dridge and tow jones indust >> the fast money. consumer discretionary stocks have been soarly. is it time to start buying consumer staples? some answers when we come back. shopping online can help save. doing it with bank of america can help save a lot more.
3:20pm
up to 20% cash back from over 300 online retailers with our add it up program. just sign up and use your bank of america debit or credit card when you shop online. it's one of the many ways we make saving money in tough times a whole lot easier. ♪
3:21pm
is to get as far away from it all as possible. don't let erectile dysfunction get in the way. ♪ viva viagra! viagra, america's most prescribed ed treatment, can help you enjoy... a more satisfying sexual experience. ready to talk to your doctor? find out how at viagra.com ask your doctor if your heart is healthy enough for sex. don't take viagra if you take nitrates for chest pain... as it may cause an unsafe drop in blood pressure. side effects may include headache, flushing, upset stomach, and abnormal vision. to avoid long-term injury, seek immediate medical help for an erection lasting... more than four hours. stop taking viagra and call your doctor right away... if you experience a sudden decrease in vision or hearing. 20 million men have had the "viagra conversation." ask your doctor if viagra is right for you. ♪ viagra!
3:22pm
average. it's time for the fast money final call. consumer discretionary stocks have been soaring lately. is now the time to get cautious? here to tell sus patricia edwards of store house partners. there's something you don't like in the personal income spending. >> the number was down 1.3%. that's bad enough but when you
3:23pm
look at may, may was up 1.3%. that's a 2.6% swing. that's going to be a huge negative for the consumer. i really think the may number was a bit of a head fake because we had some stimulus in there. >> the chart right now, huge swing over a two-month period. what impact does that have when it comes to stocks? >> i think when you start looking what will people were expecting out of some of these retailers, i think people expect a lot more than they're going to get when we get the retail sales numbers on thursday and start in on the retail earnings next week. it's been a high beta play and it's time to take some of that beta off the table and go to stuff a little more steady eddie even. >> sell if you've got some of those retailers. do you even dare to short them? >> shorting is difficult. for a lot of things you can go to a short etf. unfortunately, there isn't one i've been able to find on the retail sides side of things. move into things that are a
3:24pm
little bit more interesting from a different perspective. that is sim stocks. we don't give up our sins. so cigarettes, i like philip morris international, they've got total international exposure, a lots in emerging markets and asia. i love the idea of a molson coors who came out with blowout numbers this week. hands down. and you've got a fair amount of international exposure that way. and then look at something like walmart. it really has not participated to the upside and the cool thing is that it's not trading expensively. you've still got 25% of revenues are international. and that's where the big growth is for them. >> all right. so avoid consumer discretionary, go with the consumer staples, the sin stocks, cigarettes, liquor stocks, when it comes to retail, walmart which i think is maybe protected. >> exact. good to see you. come up on "fast money" tonight
3:25pm
with the s&p at 1,000, we'll see if it can hold by the end of the day. could some stocks have ridden this rally undeservingly in the traders look for what may be green overshoots in this market. plus, what's your best mood ahead of cisco's results tomorrow? will the tech bellwether throw a wrench into the rally. melissa and the traders are alive at 5:00. >> the dow jones industrial average in positive territory. nasdaq can't get up there. a few minutes to go before the closing bell. >> coming up next it, charlie gas pa rin know tells us what he's hearing about the future of bank of america's ceo, ken lewis. oof!
3:26pm
i hope he has that insurance. aflac! you really need it these days. how come? well if you're hurt and can't work it pays you cash... yeah to help with everyday bills like gas, the mortgage... ...and groceries. it's like insurance for daily living. so...what's it called? uhhhhh aflaaac!!!!
3:27pm
oh yeah! that's it! aflac. we've got you under our wing. a-a-a-aflaaac!
3:28pm
welcome back. earlier today, senator schumer said an sec ban on flash trading was in his words imminent. in response, sec chair mary schapiro confirmed her staff is discussing how to eliminate the inequity of/orders. the sec appears to be moving pretty fast on this issue. are they moving too fast? joe garonsky from rosenblat securities, another well-known
3:29pm
figure, michael whitman from stuyvesant trading group. joe, slash orders are pretty simple and give certain members of certain exchanges the ability to see buy and sell orders a few milliseconds ahead of others. is it cause for concern and should the sec be moving on it. >> >> i do think it's cause for concern. it's clear how they benefit the exchanges, the broker dealer who's use them to improve their margins and also the recipients of/orders. i'm not clear how it benefits the public customers. i think an investigation is in order. you know, they should look at this and see if it's something that should be considered for a ban or marylandfication. >> michael, flash trading is a subset of high frequency trading, relatively new. can an argument be made it should continue to be made allowed. >> yes, high frequency trading doesn't have much to do with flash trading. flash trading is when an individual puts an order in and wants to sweep the offer.
3:30pm
normally any customer puts that order in, it goes through the street and takes the stock. a customer has to choose to come in as a flash bid. the reason is just for tape. they don't want to pay the tape fee. it's prints on the internet. this whole thing is a complete joke and going after the equity markets which function so much better and over the counter markets and all the bond markets that took us down in the first place two years ago. >> how did flash trading come about? high frequency trade has been around for dozens of years. yet, all of a sudden this issue comes up on flash trade. it'set relatively new. >> flash trading was -- the first flash traders were invented by a cbsx and direct edge poplarrized it in 2006. they've been around for a while more recently as they gained market share, nasdaq came out with order types to compete. i think the new york stock exchange in particular has been against flash orders and has
3:31pm
pushed the sec on that issue. i think that general, there has been as michael said, there's a little bit of a mix-up between high frequency trading and flash. flash is a particular order type. we generally view high frequency trading as net beneficial to the markets but flash is a cause for concern. >> we've got ten seconds. could you understand, michael, how the public is outraged there may it be people who can trade a millisecond ahead of other people? understand. >> it's published on their website, published everywhere except the nasdaq tape because you can't publish across markets. the customers choosing to put it in should be getting 9 rebound. it should be beneficial for the customer. this is smoke and mirrors. >> joe and michael, i appreciate your expertise. michelle, back to you. >> thank you. bank of america, does it have a timetable for when it could replace ceo ken lewis? and are the people who got new titles at b of a yesterday the only candidates for the top job
3:32pm
be? charlie gasparino joins us with the details what he's hearing. >> it could be any minute. >> any minute what? when they replace him? >> the brokerage firm is coming. the top, the -- this is what we're getting. the dust is settling. we heard the initial take that these five people that we have the list of the five people supposed to replace ken lewis. >> just brought it up here. >> brian moynihan, sally krawcheck, tom montague, barbara desoer, joe price. if ken lewis has his way, he's going to be in there for a year, maybe longer. people at b of a, they are not ruling out an outside replacement taking over for ken lewis in that period of time. i mean, ken lewis wants to stay, wants to repay the t.a.r.p. money and return the place back
3:33pm
to profitability. these are people close to ken lewis. if we show that list, i can point to negatives, positives obviously, but negatives on every one of them. sally was one of the best brokerage analysts i've ever reported on. she wasn't a very good cfo of citigroup and i'm not saying this isn't what most analysts say. joe price, he's the cfo of i guess b of a right now. brian boyny han was a lawyer in the past. a lot of people say there's the chuck prince principle right there. tom montag, a guy that ran merrill lynch's trading desk when they lost the $15 billion. barbara desoer, i don't know much about her. >> she's probably thrilled about that. >> right. but what people are telling me, these are all very smart people, not necessarily someone you think is going to run something as big as b of a. they're telling me lewis doesn't
3:34pm
want to leave immediately, year, year and a half. that does give him the time and within that period of time, they may opt for an outside candidate. here's the fly in the ointment on the outside candidates, the need to pick someone quick which would come from those five people. it's the andrew cuomo investigation. yesterday the sec ended its investigation or at least concluded a major part of it on whether bank of america disclosed the right stuff about its merrill lynch merger. they pointed to specifically the bonus information. the sec said they did not adequately disclose that investors before they voted to approve the deal in december 2008. they fined bank of america a paltory $33 million. i can tell you this. sources are telling cnbc when that edict came out, when that civil case was settled without confirming or denying the allegations, andrew cuomo ramped up his own probe which takes a look at this in a much more serious way for b of a.
3:35pm
he's looking not just at the bonus. he's looking at disclosure of the losses. did ken lewis or john thain, did either of them disclose the bonuses properly? that's what he's looking at. if he finds there's a problem there that could really expedite ken lewis's departure if he was involved. you may find he's not. it's not his fault, it's outside counsel. it's john thain's fault, he may find it's nobody's fault. >> certainly not over yet. thank you, charlie. we've got 20 more minutes before the closing bell. the dow jones industrial average last we checked was slightly in negative territory as was the nasdaq, as well. bob? >>en an michelle, up next it, the outlook for i.t., information technology. the ceo of cognizant technologies explains were why its company is raising revenue guidance. >> before the bell. after the bell, ford's monthly sales increasing for the first time in nearly two years.
3:36pm
mark fields gives us his insight into when the automaker could draw back into profitability at 4:00 p.m. eastern time. others buy the car of their dreams. during the lexus golden opportunity sales event, you can do both. it's an opportunity today. it's a lexus forever. special lease offers now available on the 2009 is 250.
3:37pm
3:38pm
3:39pm
welcome back. breaking news to reported. those two journalists being held by the north korean government are going to be released. norah o'donnell joins from us washington, d.c. what are you hearing? >> well, the north koreans state news agency is reporting kim jong-il, the leader of north korea who has met with former president bill clinton has ordered the release of those two u.s. journalists and he has pardoned them. i think the next step is that those two women could be heading back home to the united states. i think generally what this means is that this has been a successful trip for president clinton. no one is calling it that yet at the white house or sources close to the clinton or even the state department because everyone is still on pins and needs. i think my sense is i've been trying to reach out to a number of officials involved in this. they don't want to say anything
3:40pm
till president clinton is wheeled up from his plane from north korea with those journalists before they start saying this has been a huge success because there is such concern about kim jong-il that will north korean leader using this whole thing as a propaganda tool. that's why there's concern. bottom line it, looks like this trip has been a success. i think it's worth noting that bill clinton has now been on the ground in north korea for about 18 hours. so this has been a lot of diplomacy. that's going on to secure the release of these two jailed journalists. remember they were sentenced to 12 years of hard labor. they have not been, however, in any kind of prison camp but at a government housing, which is actually pretty nice. there have been concerns about their health. they've now been held 4 1/2 months. one other important thing to point out. already we see the north korean leader kim jong-il using this whole thing as a propaganda tool. they've been reporting that bill
3:41pm
clinton brought some personal letter, some personal message from president obama to the north korean leader. the white house said today not true. we have the north koreans saying there have been exhaustive talks on a whole range of issues. the white house has been trying to make very clear this is a private mission by president clinton, that it's a humanitarian mission because they don't want this to be seen as a way that the north koreans could start talking about nuclear issues or other issues. i think that's significant. but bottom line, we may here in the next several hours, perhaps later tonight that bill clinton is headed back to the united states. that's certainly what everyone is hoping. >> norah, thank you cognizant beat the street in its second quarter report turning in a 36% increase in profits and raising full-year revenue growth forecast. optimistic outlook listing sharts by 10%. joining us here in the studio, francisco d'souza. president and ceo.
3:42pm
>> wonderful to be here. >> is your story what we're hearing about technology all the time when you're in the middle of recession, companies turn to companies like yours to help them save money? >> that's part of the story. you know, as companies are under pressure on the cost side, they turn to companies like cognizant to increase productivity or reduce costs. that's only half the story. the other half of the story is that we have been investing in a whole range of new services, the ability to innovate with our clients to coinnovate and help them get more productive is the other part of the story. >> financial services are 44 3ers of revenue, health care is 25% of your revenue. with all this talk of health care reform, how much more revenue could you get out of health care as president obama continually talks about migrating all this data and paperwork online? >> we saw tremendous growth in our health care segment even this quarter it, grew 7.6% from last quarter. so strong growth in our health care. >> is that more people or different services?
3:43pm
what's driving that? >> it's a little bit of everything. a lot driven by regulatory changes we are seeing coming down the pike, icd 10 and the 5010 remediations required by the government for the health care system to become more productive overall. so that's driving a lot of our growth in the health care area. >> financial services 44% of your revenue. is armageddon over there? what kind of changes have you seen and do you predict when it comes to all these financial companies that have been so much trouble and their ability to keep using you and paying your services? >> financial services was flat this quarter from last quarter. we expect an increase in the coming quarters. what we saw in financial services was what i would call a stabilization of demand. we saw clients. >> that's good. >> that was very good trend. we saw demand stabilize for our services and expect over the course of this year we're cautiously optimistic that demand in financial services will start to come back for our services.
3:44pm
>> most of your employees are in india. >> the majority of our employees. >> how did you feel when president obama earlier this year talked about providing tax benefits for companies that provide jobs in boulder rather than bombay? >> look, i think that the critical thing to focus on here is how do we get the economies of the world around the world healthy most quickly. the quickest way to do that is to give companies in different parts of the world access to the best talent regardless where that talent is located around the world. there is tremendous talent available in the united states and we are active employers here in the united states. we have 12,000 people in the united states. but equally we've got talent around the world in india, in china, latin america. and we think the best way for to us help our clients be stronger businesses is by givinging you access to that global talent pool. >> state of economy, where are we when you look around the world in terms of whether or not we're going to finally recover here? >> i don't have a crystal ball on the economy. our planning assumption is that the economy continues to remain weak. >> weak. >> through the rest of the year. >> define weak.
3:45pm
>> we didn't expect it to get materially worse where it is this quarter but don't expect it to get better. >> any part of the world you think turns better than the rest of the world. >> we're seeing good demand in asia and a little bit in north america but really we're seeing good demand in asia. europe we think will be lumpy for the rest of the year. >> india was facing issues with rising employee costs because you didn't have enough supply of educated labor. has that improve the with the recession or still a problem? >> know, the best talent in the world is always going to be in demand regardless of the economic cycle. we are focused on having the best talent available at connie distant on behalf of our clients. wage pressure has baited through the recession in india, but we expect that you know, the best talent is going to be in high demand and that's always our planning assumption. >> thanks for coming in. >> all right. bob. >> 12 minutes to go before the closing bell. bounce on either side of plus or
3:46pm
minus 30 points led by the financials. michelle? >> the financial sector outperforming the rest of the market today. you may be surprised which group within financials is leading the charge.e details when we come back.tr trying to grow it. the algae are very beautiful. they come in blue or red, golden, green. algae could be converted into biofuels... that we could someday run our cars on. in using algae to form biofuels, we're not competing with the food supply. and they absorb co2, so they help solve the greenhouse problem, as well. we're making a big commitment to finding out... just how much algae can help to meet... the fuel demands of the world.
3:47pm
3:48pm
3:49pm
some of the day's research calls, fbr capital markets upgrading talbots to outperform from market perform raising price target to $7 from $5 because of encouraging cost controls. you can see the stock move higher by 23% today. robert w. baird downtown grading barnes group to neutral from outperform because of weak demand outlook for the rest of the year. that stock off more than 4%. jpmorgan upgrading wms industries to overweight from neutral and hiking price target to $43 from $29 because of momentum for new products and a better than expected revenue forecast for 2010. a gain of 12% in the wake of that. >> let's stay on the stock news. look at some of today's under the radar stocks. louisiana pacific narrowing second quarter los loss to a better than expected $29 million.
3:50pm
and church and dwight which makes arm & and hammer and oxyclean reporting a jump in profit to $5 million. that easily beat wall street estimates because of strong domestic sales. the company raising its dividend and full year outlook as a result. the pantry seeing its third quarter profit plunge to just $43,000 after earning $11 million a year ago because of a sharp increase in wholesale gasoline costs. >> bab, thanks. the improving home sales data may have made the headlines but reits stole the show. matt nesto joins with us details. >> just very low key here. i do want to bring this to your attention. the reits, my friends are flying. we take a look today at the performance versus all the other 24 industry groups out there, it's reits and reits by a mile and pulling away at the pack 4.5%, 4.5 lengths at the wire as we come down to the closing
3:51pm
bell. clearly a strong move. it's one of four sub industries that makes up that monster we call the xlf or the financial sector index. if we take a look what's going on in this property play, there's a number of reasons why 62 of 64 reits in the supercomposite reit index are higher today. they're burying the street. if you take a look at some of the results out there, and i'll give them to you in a minute, they show things like the stabilization of the occupiescy rates and respects. we just needless worse. they're still down from a year ago in many places but appear to be coming back to some degree. some of the prime retail and office and commercial and apartments are not going away. they're not empty. if they're well run, in the right location, they're still doing well. also cash flow dividends don't hurt. anywhere from 5 to 8%. here are three big dog daddies moving big today.
3:52pm
macerich and simon and vor nad doe is of course, a commercial business properties. and then if we take a look at page 2, other big movers. these are smaller lesser known names. parkway properties, that's a commercial office reit, if you will, apartment investors big company, 8.5% mood move today and axedrial. behold the reits, they're on a roll. >> what kind. >> 5 to 8%. some of them get up to 10. in the middle conservatively 6%. >> i call him ernesto. coming right back with the closing countdown. >> we'll break down the latest results from electronic arts and crafts minutes away at 4:00 p.m. eastern time.
3:53pm
3:54pm
bull market or bear, traders are always hungry for ideas. trading is all about strategy. and strategy... is all about information. heat mapping shows me
3:55pm
where the money's moving. twenty five hundred stocks... one quick look. that's where the action is. plus, this amazing gadget... it's called the telephone. i can call td ameritrade anytime and talk trades, strategy... anything. td ameritrade. built by traders, for traders. this is what i need. announcer: trade commission free for 30 days, plus get 100 dollars cash, when you open an account. . >> bob pisani where we're ending the day basically flat on either side of plus or minus 30 points for the dow jones industrial average. but the curious thing is financial stocks interest rate sensitive stocks in generally
3:56pm
have been outperforming the market for the last several days. it take a look at major indexes. matt was just talking about reits. the real estate index, the major index everybody uses has generally underperformed quite notably earlier part of the year. just in the last few days, it's begun moving to the upside. no matter what anybody tells you, the fundamentals of commercial real estate are very poor. a lot of people are notably underinvested in reits. if you believe in the general market move it up theory, you've got to have certain kinds of market representation. same situation with some of the big bank stocks. you've got regional banks with credit deterioration issues outs there but again, if the market starts improving, yield curve starts stooep steepening, these banks will be more profitable down the road. banks have also been outperforming the market recently. the market leaders was largely technology stocks and materials. financials were an earlier year
3:57pm
story. now financials are also starting to do a little bit better. same situation with home building stocks. disaster truss in the early part of the year but recently we've had a little bit better information on home building and today we got existing home sales, pending home sales contracts, home builders have also been moving up and have been outperforming the s&p 500 despite the fact we didn't get particularly great earnings reports. for example, from pulte or from centax or d.r. horton. yet, again, bulls are successfully arguing the information in the next two to four quarters is going dob drastically better. you saw that with caterpillar with jim owens talking about earnings in 2012 multitudes of orders better than right now in 2009. there's the closing bell. there it is. well, i was close. trader talk.cnbc.com. michelle is next.
3:58pm
>> it's 4:00 p.m. on wall street. welcome to the "closing bell." i'm michelle ca rur so carrara in for maria bartiromo. a choppy trade on wall street. strength in the financial sector was offset by weakness in commodity related stocks. also weighing on the minds of investors, mixed economic data. pending home sales better than expected. personal income fell by the largest amount in four years. the sec working to create a rule that would ban a controversial practice known as flash tradinging. here's a look how we finished the day on wall street. went into porve right toward the end. the dow jones industrial average sitting close to the highs of the day higher by last i checked 26 points. the nasdaq was try toiing to ea into positive territory and the s&p ended higher with more than two points, nearly three points
3:59pm
back above 1,000 or at least holding on to it. bob pisani is our eye on the floor at the infonrk stock exch. >> we were close to flat on the s&p close to the ends of trading today. we're essentially ending at the highs for the day. interest rate sensitive stocks, i know i've hammered away at this but that's the curious thing that move here today. they have been outperforming the last several days. matt talked about the reits earlier. i was speaking about them as well here today. right across the board, whether you're looking at sl green or the retail reits like kimco, avalon bay all had nice days today. nothing came out that fundamentally altered the outlook. they have been out performing in the last several days. a lot of people are arguing big investors are underinvested into things like reits even